Office developer Bhiraj Buri Holding Co will look for locations in outer Bangkok to avoid high competition in the central business district (CBD), where a massive amount of new office supply is scheduled for completion.
Chief executive Prasarn Bhiraj Buri said the company will remain conservative in developing new offices, even though Bangkok office space vacancies are low, as there will be a huge amount of new office supply in the near future.
"We will not make a huge investment as we are just a small firm, a family-owned business," he said. "From 2020 onwards, many large projects with office spaces will be completed gradually."
Office supply in Bangkok totals 8.5 million square metres, with a vacancy rate of under 10%. In 2019, the total amount will reach 9 million sq m with an additional 484,740 sq m coming between 2017-19, according to property consultant CBRE Thailand.
In a report on the Bangkok office market, property consultant JLL Thailand said new office supply set to be completed during 2017-21 totals 1.06 million sq m, comprising 220,100 sq m in 2017, 216,824 sq m in 2018, 138,992 sq m in 2019, 180,184 sq m in 2020 and 307,500 sq m in 2021.
In 2022-25, 500,000 sq m in new office supply will be sourced by only one project, One Bangkok, a mixed-use development with a gross area of 1.83 million sq m on a 104-rai plot on Wireless and Rama IV roads.
The project, with an investment of 120 billion baht, will be developed by TCC Assets Thailand and Frasers Centrepoint Ltd, both owned by billionaire Charoen Sirivadhanabhakdi.
Mr Prasarn said the Bhiraj Buri will develop Summer Lasalle, a mixed-use development on an over 60-rai site on Sukhumvit Soi 105 or Soi Lasalle, with an investment of 5 billion baht over the next 3-5 years.
The project will comprise 25 three-storey office towers with a lettable area of between 1,600-1,800 sq m each and a monthly rent of between 500-600 baht per sq m. There will be also two community malls with an area of between 3,500-5,500 sq m for rent and a hotel.
"We will launch booking for office spaces in the second quarter this year and will develop them after getting reservations," he said. "Each office tower will have a gross area of 5,000 sq m. At this size, construction will be fast, only 6-7 months to complete."
Target tenants will be young people, startups and entrepreneurs. The company is in talks with a Japanese auto parts manufacturer that is interested in renting space.
"Locations in outer Bangkok are becoming trendy for offices, especially among new business owners who don't want to get through heavy traffic jam to the CBD," he said. "We will look for non-CBD locations to develop new office spaces."
Within the CBD, Bhiraj Buri has a four-rai plot on Sathon Road close to BTS Surasak. Though the plot could be used to develop new property projects, the company decided to spend tens of million baht to renovate the three existing towers that make up Bhiraj Tower.
The towers will be launched in the third quarter of this year, introducing a total lettable area of 3,500 sq m.
The company has a total lettable area of around 100,000 sq m at three existing office towers: 33,000 sq m at UBC II, 47,000 sq m at Bhiraj Tower at EmQuartier and the recently completed 32,000-sq-m Bhiraj Tower at Bitec with an occupancy of 100%, 94% and 20% respectively.